Meta has been ordered by a judge in New Mexico to pay $25 billion to the state after a jury found that the social media company deceived consumers for years about its data privacy policies.
Judge Francis Mathew handed down the amount, which New Mexico Attorney General Raúl Torrez described as “one of the largest, if not the single largest state verdict against a company in American history.”
“This judgment should be a signal, an unambiguous message, to Silicon Valley,” Torrez said in a news conference.
In September, jury members found that Facebook had made false or misleading statements by telling consumers that they controlled how their information was shared. The social media giant also misled consumers by claiming it didn’t sell or share personal information with advertisers, the jury concluded.
The jury found that the company’s “most senior leadership,” including Meta CEO Mark Zuckerberg and former chief operating officer Sheryl Sandberg, made misrepresentations about the service’s data privacy policies, the judge ruled.
“These communications were part of a coherent strategy designed to mislead the public,” Mathew wrote.
The case stemmed from allegations that Facebook deceived users about a data breach stemming from a third-party personality quiz that harvested data from roughly 87 million profiles and sold it to a political consulting firm, Cambridge Analytica, to generate targeted ads.
In a statement on Wednesday, Torrez said that the case “has always been about more than one company or one scandal.”
He added, “It is about whether corporations can mislead consumers about what happens to their personal information without facing meaningful consequences.”
C.J. Mahoney, Meta’s Chief Legal Officer, said in a statement that the company is confident it will “prevail on appeal.”
“This ruling, and the Attorney General’s approach to this enforcement, makes it all but impossible to do business in the state of New Mexico,” Mahoney said. “At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online.”
Where the $25 billion could go
Under the New Mexico Constitution, fines for violations of consumer protection laws are funneled toward state education spending.
“We may have paid for the construction of schools for the next 100 years,” Torrez said, while noting that the money would be tied up if Meta appeals the decision, as expected.
Forty-eight other states settled with Facebook in a nationwide case, but New Mexico chose to take the social media company to court on its own.
Attorneys for New Mexico had sought $35 billion to $40 billion, arguing that the company would only change its ways with a sum large enough to affect its stock price.
Lawyers for Meta said the company should pay no more than $3.4 billion, arguing that a much larger award would violate due process, be unconstitutional and not hold up on appeal.
In 2019, the Federal Trade Commission hit Facebook, then called Meta, with a $5 billion fine over its role in allowing Cambridge Analytica to collect users’ data without their consent.
Meta argued that New Mexico failed to prove that the tech giant’s executives made misleading statements about privacy and that its content moderation practices harmed state residents.
Shares of Meta rose $13.56, or 2%, to $707.81 in Wednesday afternoon trading.
